Petrol prices may touch all time high as oil companies pass on the burden

It's a new day and an all new fuel price - for the fourth day straight. As if the worst fear of every citizen has come true, fuel prices are swiftly moving towards unprecedented levels. In the capital city, diesel has already surpassed its record and is at an all-time high. Petrol prices, too, have been increased by 22-24 paise across Delhi, Mumbai, Kolkata and Chennai. The oil prices are currently revised everyday at 6 am, after state-owned oil companies decided to do away with the 15-year-old practice of revising fuel prices on the 1st and 16th of every month.

As of now, petrol price in Delhi is Rs 75.32 per litre after an increase of 22 paise since yesterday. The highest recorded petrol price in the capital till now has been Rs 76.06 per litre. In Mumbai, petrol is now priced at Rs 83.16, while it is Rs 78.01 and Rs 78.16 in Kolkata and Chennai. In Bengaluru, petrol price is now at Rs 76.54 and in Hyderabad it is Rs 79.78. In Bhopal, Jalandhar and Patna, prices have crossed the Rs 80 mark and are now at Rs 80.89, Rs 80.55 and Rs 80.82 respectively.

Diesel too has never been sold at such a price in Delhi before. Currently, a litre of diesel in Delhi will cost the buyer Rs 66.79 - that is more than the cost of a litre of petrol in Port Blair where petrol price is at Rs 64.96 and only slightly better than Panjim's Rs 69.41. In Mumbai, diesel price has reached Rs 71.12, while it is Rs 69.33 in Kolkata and Rs 70.49 in Chennai. In Bengaluru, a litre of diesel is now for Rs 67.94 and in Hyderabad it is Rs 72.60.

The fuel price hike is being influenced by the dipping rupee-dollar forex rate and the increasing global crude oil rate. The rupee has been down by 6% against the US dollar so far this year. To add to that, Brent crude oil has touched $79.47 a barrel, its highest since November 2014. This is not very reassuring for the common man. Moreover, since petrol is not under GST, heavy duties levied by both Centre and state are only adding to the woes.

However, before the Karnataka polls, fuel prices remained unchanged for 19 days. State-owned oil marketing companies are estimated to have lost about Rs 500 crore as they absorbed higher cost resulting from the spike in international oil rates and fall in rupee against the US dollar during this period. Oil PSUs that had kept rates unchanged for nearly three weeks before Karnataka polls despite a spike in input cost, reverted to daily revision in prices as soon as the state voted.

The BJP-led government had raised excise duty nine times between November 2014 and January 2016 to shore up finances as global oil prices fell, but then also cut the tax once in October last year by Rs 2 a litre.